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The Housing Bubble Is About To Burst

Posted by: Chris Steins
Thanks to: Chris Steins
14 July 2004 - 5:00am

Business Week evaluates the the impact of rising mortgage rates on the housing bubble -- and arrives at dire conclusions.

"After an amazing four-year boom in residential real estate, the housing market could finally be topping out and heading for a downturn... It's always tricky to call the top of an overheated market, and the pessimists have been wrong before... But this time something important is different: Interest rates are inching up...

Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

Full Story: Is A Housing Bubble About To Burst?
Source: Business Week, July 12, 2004
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